Oil companies offer system for future

Published 12:00 am, Thursday, July 22, 2010

Four of the nation's largest oil companies said Wednesday that they will commit $1 billion to set up a rapid oil spill response system to deal with deep-water blowouts in the Gulf of Mexico.

Exxon Mobil Corp., Chevron Corp., ConocoPhillips and Shell said the system of underwater capture devices and surface containment vessels, similar to what BP is using now to control its spill in the gulf, will be designed to capture up to 100,000 barrels of oil a day before it spills into the sea from wells sitting in water as deep as 10,000 feet.

Unlike BP's system, much of which was designed and built on the fly to handle the unfolding gulf disaster, the new equipment will be pre-engineered, constructed, tested and on standby for immediate deployment in case of an emergency.

As part of the initiative, the four companies will form a nonprofit group called the Marine Well Containment Co. to operate and maintain the system.

Other oil companies will be asked to participate in the organization, including BP, as soon as it gets its well under control.

The organization will be patterned after the Marine Spill Response Corp., formed to help clean up oil spills after the Exxon Valdez accident 1989.

Work on the initiative will begin immediately, with Irving-based Exxon Mobil taking the lead, the companies said in a statement. The system should be fully operable in 18 months.

Cathy Cram, a spokeswoman for Houston-based ConcoPhillips, said company officials began meeting with lawmakers Wednesday to brief them on the plan.

“As we watched the events unfold in the gulf, it certainly became clear that we needed to have a better response system in place, so I think that all of the companies started thinking about it fairly quickly, and we all came together as a group a number of weeks ago,” Cram said.

The proposal comes as the oil industry attempts to stave off new laws and regulations aimed at overhauling offshore drilling in the wake of the BP disaster.

BP's Macondo well blowout April 20 destroyed the Deepwater Horizon drilling rig, killed 11 workers and unleashed the worst oil spill in U.S. history.

Matthew Beeby, an energy analyst with Global Hunter Securities in Fort Worth, said the initiative is clearly a bid by industry to mend fences with government and an American public angered over BP's spill but also concerned about the potential loss of jobs from a six-month deep-water drilling moratorium.

The Obama administration imposed the moratorium while it investigates the causes of the Macondo blowout and devises new safety rules.

The BP disaster and ensuing investigations into industry practices revealed serious weaknesses in deep-water oil and gas operators' capabilities for handling a blowout and spill in deep water.

It was only after a string of failures over nearly three months that BP finally was able to stop the Macondo well a week ago after installing new capping equipment. Until then, the well was spewing up to 60,000 barrels of oil a day into the gulf, according to government estimates. A barrel is 42 gallons.

The initiative is industry's signal that it's serious about remedying the problem and protecting the gulf, Beeby said. “A billion dollars is a pretty significant investment,” he said.

Not everyone is buying into the message.

“The industry is doing everything they can to reassure the public that they can continue drilling safely, but the truth is, they can't,” said Kristina Johnson, a spokeswoman for the Sierra Club. “Everywhere they drill, they're putting communities at risk for another disaster,”

“If a little is good, Congress could decide that more is better, so it may not be the endpoint of regulation, but the starting line, which would not be the goal of the industry,” Book said.

In the gulf Wednesday, BP's efforts to control the Macondo well remained in limbo.

A tropical wave southeast of Florida threatens to enter the gulf by the weekend, with several forecast models showing the system tracking close to the site of the well about 40 miles from the mouth of the Mississippi River.

Even if the system doesn't develop into a storm, it could produce high seas that would lead officials to withdraw ships involved in monitoring the site of the well and to evacuate personnel on rigs drilling two relief wells.

On Wednesday morning, BP put a seal called a storm packer into the farthest-along of the two relief wells.

The device is designed to keep anything from getting in or out of the well if the rig is evacuated for the storm.

While crews remain on the rig, the seal requires them to suspend work on the well, BP Vice President Kent Wells said.